Do dividends convey information about future earnings?

Ham, Charles; Kaplan, Zachary; Leary, Mark T.

doi:10.1016/j.jfineco.2019.10.006

Cited by 85 publications

(37 citation statements)

References 52 publications

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“…We find that dividend payments following the acquisition are higher when the acquirer experiences a greater change in profitability (∆ Earnings), consistent with the informational content of dividends. These M&A-specific findings complement the more general results on dividends and profitability (e.g., DeAngelo, DeAngelo, and Skinner, 1992;Brook, Charlton, and Hendershott, 1998;Nissim and Ziv, 2001;Ham, Kaplan, and Leary, 2019). We find no support for the life cycle theory of dividends.…”

Section: Multivariate Analysissupporting

confidence: 74%

Active catering to dividend clienteles: Evidence from takeovers

Golubov

Lasfer

Vitkova

2020

Journal of Financial Economics

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Section: Multivariate Analysissupporting

confidence: 74%

Active catering to dividend clienteles: Evidence from takeovers

Golubov

Lasfer

Vitkova

2020

Journal of Financial Economics

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“…The evidence on this control is mixed. While Ham et al [62] find that analysts affect the likelihood of paying dividends, Barros et al [53] find mixed results; -…”

Section: Methodsmentioning

confidence: 99%

Does ESG Affect the Stability of Dividend Policies in Europe?

2020

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Sustainability has become a significant issue for firms and investors throughout the world, although it cannot be attained if policies impact the stability of firms’ dividend policies. In this paper, we use data from the Stoxx Euro 600 firms from 2000 to 2019 and the ESG (environmental, social and governance) scores from Thomson Reuters to assess the relationship between ESG responsibility performances and the firm’s dividend policy. The results indicate that more sustainable firms exhibit a more stable dividend payout. This result is also valid when the ESG pillars are analysed, specifically, the environmental and governance pillars. The findings further suggest that higher ESG scores reveal better long-term alignment with shareholders and other stakeholders due to more proportionally stable profit sharing.

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“…A handful theoretical and empirical studies on dividend policy are available. The issue of the dividend is very crucial in the financial market due to various reasons; first, dividends act as a signal used by the public to reflect the firm's financial stability and growth prospects, Ham et al (2019). Secondly, dividend policy plays a very essential role in determining the corporate capital structure.…”

Section: Related Literature and Hypothesis Developmentmentioning

confidence: 99%

Towards Extending Dividend Puzzle Debate: What Motivates Distribution of Corporate Earnings in Tanzania?

Lotto

2020

IJFS

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This paper investigates the determinants of dividend policy in Tanzania. The study employed a panel data of non-financial firms listed on the Dar es Salaam Stock Exchange (DSE) for the period 2008–2017. The paper reports profitability, liquidity, firm size, leverage, firm growth, previous dividend, and GDP as the major determinants of corporate dividend policy. According to the results, leverage, firm growth, and GDP are negatively related to dividend payout ratio while firm size, profitability, liquidity, and lagged dividend are positively related to dividend policy. More specifically, large-sized firms, highly profitable firms, and firms who paid dividend in previous years are more likely to consider paying dividend. However, payment of dividend will all depend on whether the firm is liquid enough to afford that. On the other hand, high-growth and leveraged firms would not probably consider paying dividend, and will, therefore, opt saving money to finance their expansion and honor their debt obligations. Following these results, corporate managers are advised to consider preferences of investors towards developing corporate dividend policy; to strive paying dividend whenever economically viable (as it signals the firm’s reputation), and to limit excessive borrowing to protect firms from getting into financial meltdown (although borrowing is considered a control tool for agency-related problems).

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Do dividends convey information about future earnings?

Cited by 85 publications

References 52 publications

Active catering to dividend clienteles: Evidence from takeovers

Active catering to dividend clienteles: Evidence from takeovers

Does ESG Affect the Stability of Dividend Policies in Europe?

Towards Extending Dividend Puzzle Debate: What Motivates Distribution of Corporate Earnings in Tanzania?

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